Data-Driven Shopper Marketing, Part 2: Gaining a 360-Degree Shopper View

Retailers and brands have blind spots when it comes to knowing what shoppers want because transactional, panel and online data is heavily siloed. A full view of the omnichannel shopper, experts say, will only come with the addition of “offline” data.In today’s Darwinian retail landscape, retailers and brands are constantly searching for the perfect pair of glasses. Marketers know they need to truly “see” and understand shoppers in order to meet expectations for a seamless journey along the increasingly multichannel/multi-device path to purchase.They didn’t always need such strong lenses. Back in the days when mass marketing ruled, shoppers would watch TV commercials, check for deals in weekly circulars and then head to local retailers. “Traditional shopper marketing was generally a rigid, straight line because most shopping decisions were made in the store,” says Holly Manners, senior analyst at Catapult and an author of the latest edition of the Digital Shopper Marketing (DSM 5.0) study.But now, with dozens of mobile, social, online and in-store shopping tools available, the lines of the typical shopping journey have blurred considerably: Are they pre-shopping? Shopping? Post-shopping? “With digital and mobile options, it’s not so cut and dried anymore,” Manners says. “Consumers have everything readily available to them everywhere.”Indeed, as the recent DSM 5.0 study points out, 44% of surveyed shoppers routinely hold on to a smartphone as they walk bricks-and-mortar store aisles, while 37% now use a PC/laptop, smartphone or tablet to shop for pet, alcohol, baby or grocery items.“Spontaneous decisions based on store stimuli are only one part of today’s shopping experience,” points out David Bell, professor of marketing at The Wharton School, University of Pennsylvania. “What about the conversation I have over coffee? What about whether or not I have a list stored in my cellphone? What about the day of the week or the location I’m in? We’re just starting to see the entire purchase process, both of the individual and the other people in their ecosystem, as part of the whole journey rather than one snapshot of the buying experience in the store.”These recent shifts have turbo-charged the already strong sense of consumer empowerment that shoppers have developed over the past 10-15 years, says Mark Hertenstein, SVP, enterprise solutions, at marketing services firm Epsilon. “As a consumer, you can now choose what messages you’ll open, what links you’ll click on and what posts you’ll read,” he says. “As a result, shopper marketing has had to reinvent itself and become a discipline based on connecting the digital footprints of shoppers to their purchase behaviors.”A Data-Driven Line of SightConnecting those footprints means gaining access to the right customer data, however, and that has been a complex conundrum in the world of retail for decades. Traditionally, retailers have had an upper hand in this regard because they own the transactional, basket-level data generated by their customers as they pass through their checkouts. CPG marketers could, however, access this data via the services of companies like Nielsen and IRI.Things began to change when some chains, most notably Kroger and Safeway, developed analytics that personalized the purchase data so they could direct relevant messaging to their best customers. “Retailers did such a fantastic job of collecting data to drive their businesses through loyalty and couponing programs,” says John Stichweh, director, digital & social marketing, at ConAgra Foods, “that the reality now is that they have much more data than CPGs have.” Some chains, he says, are very open and will share that data with their manufacturer partners to help mutually grow the business. Others, however, view it as an asset they intend to hold closely. “Both of those strategies are fair,” Stichweh says. “There’s not a right or wrong answer.”When retailers share with brands, data can be harnessed across the digital world and into the store, creating the potential, at least, for a seamless shopping journey. “Staples is a good retail example of that,” says Eric Stein, executive vice president of digital strategy at Epsilon. “Staples’ vendors can gain access to their data to target audiences that are important to them and then drive sales through a co-branded campaign. We’ve seen a tremendous impact with these test campaigns.”Stein says that Hewlett-Packard, which is a big Staples vendor, “had never been able to have a one-to-one customer relationship at retail. HP could online, but not offline, where the majority of commerce still happens, because they don’t have stores of their own. But they were able to take an audience of people who bought printers, ink and toner, or any related HP product, and identify them through Staples’ CRM/loyalty database and bring that audience online to match to cookies, or Facebook, and then advertise to those folks in a co-branded manner to try to drive sales at Staples.”Working with a retailer one-on-one is ideal, Hertenstein agrees, and sharing truly creates win-win opportunities. “But one big challenge to data sharing is that some retailers set a pretty high price tag on utilizing it,” and others can’t share due to company policy. The good news, Hertenstein says, is that there are ways over these brick walls by using survey and panel data as well as third-party demographic and geographic data – proxies for the data gaps, in other words, that enable marketers to bypass retailer data.One workaround used by some CPG marketers, Stichweh says, was the adoption of digital technologies that enables them to create direct links with consumers and develop ongoing dialogues. “There have been some really smart cases of brands getting closer to customers, including Pampers and Coke,” he says. “The availability of data is enabling more brands to do that, as long as the tactic scales.”But too much unstructured data across digital platforms has the potential to turn into more of a burden than a blessing, says Haley Rubin, former digital shopper marketing manager at alcoholic beverages company Diageo – especially for companies that lack the skills to organize, interpret and analyze it properly: “The overwhelming amount of data now is daunting. The biggest challenge we face internally is the amount and complexity of the data we are constantly exposed to and figuring out which is the right data to sort through.”Gaining that Clear ViewThe key to data-driven success, say marketing experts, is gaining a 360-degree view of the customer, which Staples and HP, in the example above, are beginning to do. That means combining offline, online and third-party data – quantitative, qualitative and online behavior – to see things holistically, says Manners, and involve shoppers in the brand story in ways that extend far beyond the point of purchase.Peter Cloutier, Catapult’s CMO, likes to share a personal example: “I pass by a local c-store on the way home each night – one of the big ones that you know. Once or twice a month my wife asks me to pick up a quart of milk, and that’s my go-to spot. But this store only knows what I buy – for my wife – and if they bumped that fact up against the range of things that a third party like Epsilon knows about me, the chain would have a much better idea about how to get me to come in for other things.”The challenge, of course, is in the management of these different types of data, says Hertenstein. “Third-party data like an Epsilon database still needs to be tied back to transactional data, while online behavior data, such as that produced via the Epsilon Response Network (ERN), has different uses and limitations. But eventually, you can get to a point where you can say, ‘OK, I know what you buy, and now I add in attitudinal behavior to get to the why you buy.’ Then you layer in another layer of lifestyle and attitudinal data to know what that person’s about.”Layer in the type of data that ERN, for example, can produce, and you will learn how certain shoppers engage with certain channels. “All of a sudden,” Hertenstein says, “you will be building your messaging strategy; targeting the right category users and sub-targeting as to different segment groups; and delivering messaging to a channel they are most interested in at a time when they are receptive to receiving it.”Coming Full CircleAccording to Catapult’s DSM 5.0 study, consumers are maturing in their level of experience with digital and their expectations when it comes to their entire shopping experience. It may take some time, but experts say that to avoid being left behind, marketers must figure out a way to:take advantage of the breadth and depth of data that exists online, offline and through third parties;target in a way that does not drive away consumers with concerns about privacy;drive data out of silos and into a larger holistic view; andhelp marketers glean insights that close loops and tie back to in-store efforts.According to ConAgra’s Stichweh, the industry is slowly moving in that direction: “My perception is that we’re past proof of concept and entering the adoption phase. Folks recognize that integrating offline and online can build businesses, but the challenge is getting from here to there. You’re talking about a lot of companies with legacy systems that have been around a long time and sit with very structured data. The new ad tech, VC-backed tools coming in didn’t begin with the legacy of those older systems, so many companies are starting from scratch.”As challenging as it is for both brands and retailers, experts agree that the industry is on a path toward bringing the customer journey full circle. “I think we are seeing a blending of what was two distinct types of marketing – brand advertising and shopper marketing,” says Graham Mudd, Facebook’s director of advertising measurement, North America. Facebook partnered last year with data companies such as Epsilon, Acxiom and Datalogix to let brands target ads to users based on what they have bought in stores, and then, in some cases, once they have been served the ads, tie things back to in-store sales insights. “What we’re seeing is that the scale of brand marketing and the precision and data-driven understanding of effectiveness from shopper marketing are beginning to integrate in powerful ways for the marketer,” he says.In general, says Epsilon’s Stein, marketers are both more challenged and have more evolving opportunities to close the loop for data-driven shopper understanding. “It’s not getting any easier out there, with so many challenges regarding cross-device targeting and following the multi-device shopper footprint,” he says. “That being said, there are more and more early stage capabilities and vendor partnerships that companies can start to leverage that are beginning to expand that line of sight toward a 360-degree customer view.”Next month: Part 3 of the Data-Driven Shopper Marketing series will explore ways marketers can “Close the Loop.”About the SponsorCatapult is the behavior-based marketing services agency that delivers accelerated business growth through the Art of Conversion™. This unique data-driven approach identifies the core, actionable insights that inspire brilliant creative with the power to convert consumers into shoppers, shoppers into buyers, and buyers into loyal advocates. Catapult delivers channel-agnostic solutions that are brand savvy, retailer smart, and digitally enabled. Catapult is an Epsilon brand.

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